Financial Plan (Budget) and Financial Reporting
What is a financial plan?
A financial plan, which used to be called a budget, must be adopted by all municipalities. The financial plan contains:
- an operating budget, and
- a capital budget
If a municipality does not have any capital expenditures planned, that can be noted in the operating budget.
Starting on March 31, 2019 the financial plan must contain a five-year capital expenditure program that includes an asset management program.
How is a financial plan adopted?
Before the financial plan is adopted, there must be a public meeting held at least 2 weeks before the financial plan is adopted. This meeting is to provide the public with information about the proposed financial plan and can be held any time before the two week deadline.
Council must adopt the financial plan by resolution at a council meeting (open to the public) before March 31.
Council meetings are always open to the public except for particular situations – see Council Meetings and Notice Requirements for more information – and council decisions can only be made at a meeting open to the public.
The Financial Plans must be submitted to the Minister by April 15. They can be sent to the Municipal Affairs Branch.
- Download the Financial Plan Adoption Checklist
Can a Municipality Budget For a Deficit?
Council cannot project a deficit in their operating budget for any fiscal year other than for amortization and the public utility.
If an operating deficit is projected at the end of a fiscal year that is not offset from a reserve fund or surplus fund, the operating deficit must be debited to the operating fund for the next fiscal year unless the Minister has approved another way to address it.
If a municipal council determines during the fiscal year that their operating expenses are likely to exceed revenues and transfers provided for in their operating budget by more than 5%, the council must notify the Minister immediately and the Minister may approve the operational deficit for that fiscal year.
Does my municipality have an annual meeting?
No. Under previous legislation, the rural municipalities used to pass their budget at an annual meeting.
Under the Municipal Government Act, there is no requirement for an annual meeting. If the Council chooses to hold an annual meeting, there are no votes of residents and no resolutions from the floor.
All Councils must have a set schedule of at least six meetings for the year that are open to the public.
What is the municipal financial year?
Starting on April 1, 2019 the fiscal year will run from April 1 – March 31.
To make this transition from the calendar year, for this year only there will be a 15 month fiscal year. It will run from January 1, 2018 to March 31, 2019.
Property taxation will remain on the calendar year.
What are the financial reporting requirements for municipalities?
Municipalities are required to submit an annual audited financial statement for the municipality to the Minister by July 15.
Municipalities with budgeted expenditures of less than $50,000 are required to appoint an auditor to conduct a review engagement of their financial statements.
Municipalities with budgeted expenditures of more than $50,000 are required to appoint an auditor to conduct an annual audit of the finances of the municipality.
Starting April 1, 2020, all municipalities, no matter what their budgeted expenditures are, will be required to appoint an auditor to conduct an annual audit of finances of the municipality.
What is the Municipal Financial Information Return (MFIR)?
The MFIR is used to collect financial data from all island municipalities. Municipal Affairs uses the data to generate municipal statistical reports and to meet reporting requirements of Statistics Canada, which uses the data for national reporting.
There are two versions of the MFIR that are updated yearly. The first version is for municipalities that do not operate a utility, while the second is for municipalities that operate their own utility. The two versions are provided below:
Please ensure that the information on tab 1 on the MFIR is reviewed and updated annually.
What are the timelines for financial reporting?
- June 30 – Chief Administrative Officers (CAOs) must have documents back from the auditor
- July 15 – CAO provides Council and the Minster with reviewed/audited financial statements. Council and the Minister receive:
- The financial statements and review engagement/audit
- A hard copy of the signed cover of the Municipal Financial Information Return (MFIR)
- An emailed digital copy of the MFIR (sent to email@example.com)
- July 30 – Municipality makes the financial statements and associated documents available to the public (public notice must be provided)
Key dates at a glance
15 month fiscal year January 1, 2018 – March 31, 2019
- PUBLIC MEETING: Not less than 2 weeks before 2018/19 Financial Plan adopted
- MAR. 31: Adopt 2018/19 Financial Plan (operating and capital budgets), establish tax rates
- APR. 15: Submit Financial Plan (budget) to Minister
- JUN. 30: Receive reviewed/audited 2017 Financial Statements from auditor
- JUL. 15: Submit 2017 Financial Statements and Municipal Financial Information Return (MFIR) to Council and the Minister
- JUL. 31: Make 2017 Financial Statements public